The initial cash outlay and cash now projections are presented below for new project that Outdoor Sports. Inc. is evaluating. Outdoor Sports is considering manufacturing a new line of laser rangefinders: Initial Cash Outlay Annual Net cash inflows Years 1 -5 Salvage value of equipment $1,500,000 $450,000 $0 The initial cash outlay represents the purchase of an equipment fo r $1 .5 million with a life of 5 years Outdoor Sports uses a cost df capita l of 12 percent for discounting purposes. It depreciates its equipment on a straight-l ine basis over a period o f five years. Ignore the effect of income taxes. Present va lue factors c 12 percent are as follows: Year 1 .893 Year 2 .797 Year 3 .712 Year 4 .636 Year 5 .567

Required: a) What is the net present value of the new project?

b) Determine the payback period for the new project

c) Find the modified payback period that takes into account the time value of mone